Jim, perhaps you are right that I don't have training or interest in precious metals. Here's what I see: QCOM is a growth stock, with earnings growth estimated conservatively at 25 percent or more for the next several years, regardless of the efforts of the GSM crowd to provide their higher cost alternative. Gold is a commodity with very little growth in industrial demand, and steady, slow growth for jewelry. Bullion is a limited market because of the cost of storing and transporting it.
Gold mining companies like Newmont can be a reasonably good investment, but only if (1) their cost of production is lower than most other companies, and (2) there is a continuing need for gold as a safe haven in unstable countries. I no longer believe there is much difference in production costs, except possibly for the Freeport operation in West Irian (Indonesia), and that one is fraught with political problems. There always is some flash point somewhere in the world, providing a momentary impulse to buy gold, but those are temporary conditions.
In short, I'm not impressed with gold as an investment, either in the form of bullion, coins, or stock. I am impressed with a company like QUALCOMM, whose real assets are in the skills of its people and the patents stemming from those skills. That, plus the inherent growth in demand for wireless communication, particularly in developing nations, is more than enough to wet my appetite.
Art |
